Street Calls of the Week
Investing.com - RBC Capital has raised its price target on 3M (NYSE:MMM) to $130.00 from $120.00 while maintaining an Underperform rating following the company’s third-quarter 2025 results. The target remains well below the current trading price of $166.64, though the stock has gained nearly 20% year-to-date. According to InvestingPro analysis, 3M appears overvalued at current levels.
The industrial conglomerate, now commanding a market cap of $88.76 billion, delivered what RBC described as a "modest/broad-based" operating beat for the quarter, with stronger organic growth and progress on new product introductions cited as positive developments. The company maintains a P/E ratio of 22.92x and generated $24.6 billion in revenue over the last twelve months.
RBC noted encouraging commentary from 3M regarding 2026 and 2027 expectations, including a macroeconomic environment similar to 2025, core incrementals of 30%-40%, and productivity gains that should offset tariffs, investments, and stranded costs.
Despite these positive factors, RBC continues to view the "looming five categories of unaddressed/unreserved of multi-billion-dollar PFAS litigation" as an underappreciated risk to the company’s outlook.
The next significant development in the PFAS litigation will be finalizing the number of cancer claimants for the personal injury class actions, with estimates varying widely on potential growth from the initial base of 14,000 claims, according to RBC. With an overall Financial Health Score of "FAIR" from InvestingPro, investors should closely monitor these developments.
In other recent news, 3M Company reported a robust performance for the third quarter of 2025, showcasing significant improvements in sales and operating margins. The company announced earnings per share (EPS) of $2.19, reflecting a 10% increase from the previous year. Additionally, 3M raised its full-year EPS guidance to a range of $7.95 to $8.05. Organic sales experienced a growth of 3.2%, marking the fourth consecutive quarter of positive sales trends. In a separate development, Morgan Stanley upgraded 3M’s stock from Underweight to Equalweight, with a revised price target of $160.00, up from $130.00. The upgrade was influenced by 3M’s progress in turnaround initiatives and improved near-term outlook. These recent developments highlight a positive trajectory for 3M amidst a challenging macroeconomic environment.
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